Getting trust distributions right

Learn about effective and compliant trust distributions for tax time.

As trustees prepare for year-end distributions, they should do the following:

• review the relevant trust deed to ensure they are making decisions consistent with the terms of the deed;

• consider who the intended beneficiaries are and their entitlement to income and capital under the trust deed;

• notify beneficiaries of their entitlements, so that the beneficiaries can correctly report distributions in their tax returns;

• consider whether the trust has any capital gains or franked distributions they would like to stream to beneficiaries; and

• check any requirements under the trust deed governing the making of trustee resolutions (e.g., that the resolution must be in writing).  In any case, resolutions regarding distributions need to be made by the end of the income year.